Feeling depressed about paper losses?

I have received notes in various forms from readers on the subject of plunging stock prices recently.

Here is an example:

Reader says...
i think i have been quite depressed over recent market falling.
sighz..

serious, paper loss about 35k. i started to doubt that whether i should
quit investing or not.




what i earned from past few years just enough to cover for my paper losses.
and marco polo alone are suffering 10k paper losses now:(

i have limited cash now.

sometime, or most time, i do feel little dissapointed on myself . feel like i am a failure, as others do investment so successful while i am just a loser.

a bit feel like to sell all and quit investing

AK says...

I have a feeling that you might have over committed to the stock market. 

You probably want to relook and decide if you want to re-size your positions, taking some losses in the process, if need be.




If you are losing sleep at night, you have probably over-invested. 

It could also be you didn't quite understand what you were buying into and whether you paid prices you could live with even in a downturn (which is when you should be thinking of buying more).

It might be a good idea to cultivate the right mindset before investing again, if you decide to continue the journey as an investor.

I recently replied to another reader in the comments section of my blog as well: here.

I also shared a conversation with a reader on Facebook:

AK has his float. Do you?

We should invest for a better future and we should invest in a way that gives us peace of mind. What is the way? 

Well, it could be quite different from person to person and I have shared mine here in my blog many times before.

Know ourselves, know our motivations and know the right tools to use.




Remember that media headlines should not be what is driving your overall strategy and, instead, thoughtful analysis of your goals (and willingness to absorb pain in market down periods) is what is necessary for a successful investment strategy.

Decide which type of investor you are before you invest and make sure the overall strategy reflects your view of the world as well as the degree to which you can afford to be completely wrong.
From:Michael Yoshikami in  Have a plan, our own plan.





Added on 21 Sep 16:
A very important thing is never to enter the stock market thinking that we will only make money. 

That is like entering a relationship and thinking that there won't be rough patches or even break ups... 

We will be setting ourselves up for disappointment. - AK

Related posts:
1. When to be fully invested in stocks?
2. Passive income: To pursue or be pursued?
3. How to size our more speculative positions?
4. Investing for income and position sizing.
5. How to have peace of mind as an investor?

Failure of 1MDB: More than economic consequences.

With the leaked video, it seems like the money did get transferred into Najib's personal account.

This explains why he has not denied the allegations and it explains why he is fighting so hard to stay in power. If he stepped down, he would be in danger of having the law come after him. A term in prison would almost be certain then.

Muhyiddin alleges Najib admitted to misapropriating funds

"Leaders are vulnerable to making big mistakes, such as violating the law or putting their organizations' existence at risk. Their distortions convince them they are doing nothing wrong, or they rationalize that their deviations are acceptable to achieve a greater good." Bill George

In ancient China, the people believed that if the Emperor was immoral or unethical, the country would suffer. It might be superstition but since Najib took power, Malaysia has had so many problems and disasters.

Being Malaysia's neighbour, Singapore should naturally be concerned.

Yes, if 1MDB should go kaput, there could be economic consequences which would affect Singapore. For example, the High Speed Rail project could be put on hold.

However, the Malaysian people's feelings against Najib could be so strong that the current tension could escalate and lead to civil unrest. The scary bit? It looks like it could actually happen.

I hope the unrest does not spill over into Singapore if it does happen.